“the torpid languor of one hand washes the drowsy procrastination of the other”.

The landscape of interlocutory skirmishes about the amendment of pleadings shifted on its axis on 5 August 2009, with the judgment of the High Court in Aon Risk Services Australia Ltd (Aon) v Australian National University (ANU). The decision has been widely reported in legal commentaries and the media.

It concerned whether ANU should be granted an adjournment of trial and leave to amend its statement of claim against Aon, when the parties were three days into a  four week trial.

ANU had commenced proceedings against 3 insurers claiming indemnity in relation to the Mt Stromlo bushfires in 2003.  Aon was joined later, on the basis that it had acted negligently in failing to renew insurance over certain properties. The trial was set down for four weeks. On the first day of hearing, ANU and two of the three insurers commenced mediation. By the third day, ANU had settled its claims against the three insurers. It then sought an adjournment of the hearing on the basis that certain events had occurred and information received before and after the mediation that made it necessary to seek leave to amend its statement of claim against Aon. The primary judge granted the adjournment and granted leave to amend. A majority of the Court of Appeal dismissed Aon’s appeal against the primary judge’s orders, but ordered ANU pay Aon’s costs of the amendment on an indemnity basis. The High Court allowed Aon’s appeal against the decision of the Court of Appeal, and ordered that ANU’s application for leave to amend its statement of claim, be dismissed.

The High Court took the opportunity to consider how Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 had been applied in practice across the country and to restate the relevant principles. J L Holdings is often relied upon as authority for the proposition that a party will be entitled to amend its pleading unless the other party can demonstrate specified, identified prejudice. Practitioners frequently relied on the statement in the joint judgment1 that case management was “not an end in itself … that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.”.

In Aon Insurance Gummow and Kiefel JJ granted special leave to appeal. Kiefel J had been the trial judge in J L Holdings who had refused to grant leave to amend the Defence, a decision upheld by the Full Federal Court but reversed by the High Court.

In Aon Insurance the application to amend was made under the relevant rules of the Court Rules Procedure 2006 (ACT), which commenced after J L Holdings. The amendment sought fell within r 502 of Chapter 2 of those Rules, which required the Court to exercise its discretion2. Rule 21 (which is based on rule 5 of the Uniform Civil Procedure Rules 1999 (Qld)3) set out the objects and purposes of Chapter 2 of the ACT rules:

(1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense.

(2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving —

(a) the just resolution of the real issues in the proceedings; and

(b) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(3) The parties to a civil proceeding must help the court to achieve the objectives. 

In considering the authorities on applications for leave to amend, French CJ (who agreed with the orders in the joint judgment) noted that the facts in J L Holdings were different in material respects to Aon Insurance:

28.  Both the primary judge and the Court of Appeal in the present case regarded the decision of this Court in J L Holdings as determinative of the approach they should take to the amendment application. But that case was factually very different. As counsel for Aon pointed out in written submissions:

1. The applicant had explained, and the Court had accepted, that the application was made late because a material fact had only recently been discovered.

2. The application was made before a hearing date was fixed and, once it had been fixed, the period of six months intervening between the application and the commencement of trial meant that the hearing dates would not be imperilled.

3. The point sought to be raised could not be avoided at trial, as it was apparent on the face of certain documents.

In reversing the decision of the Full Federal Court, which upheld the primary judge’s refusal to grant leave to amend the defence, this Court held case management principles to be relevant, but said that they could not be used to prevent a party from litigating a fairly arguable case [footnotes omitted].

The Chief Justice restated the principles in this way:

30. It might be thought a truism that “case management principles” should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.

The joint judgment expressed it even more directly:

111.  An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

112. A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

113. In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings. [footnotes omitted]

They went on to note that an order for costs will no longer be regarded as a panacea that heals all: “The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment”.4

Heydon J (who agreed with the orders in the joint judgment) expressly stated5 that in jurisdictions having rules similar to rr 21 and 502 (such as Queensland), J L Holdings has ceased to be of authority. In doing so, he noted that: “There is a common opinion — it is far from universal, but it is common — within the judiciary and the legal profession that Queensland v J L Holdings Pty Ltd, whether it has been correctly understood or not, has had a damaging influence on the conduct of litigation.”

The Court held that matters relevant to the exercise of the discretion to grant leave to amend included:

• the extent of the delay in seeking to amend;
• the costs associated with that delay;
• prejudice to the opposing party if leave were granted;
• the nature and importance of the amendment to the party applying;
• the point the litigation had reached, relative to the trial commencement date;
• prejudice to other litigants awaiting trial dates; and
• the explanation for the delay in applying for the amendment. 

In allowing the appeal, the High Court held that the primary judge and majority in the Court of Appeal had not had sufficient regard to these important features of ANU’s application for leave to amend6:

• It sought to introduce new and substantial claims which would require Aon to prepare a new Defence as if from the beginning;
• The application was brought during the trial and would require abandonment of the remaining scheduled weeks of trial;
• There was a question whether even indemnity costs would overcome the prejudicial effects on Aon;
• ANU deliberately offered no explanation about why the case had been allowed to proceed to trial in its existing form when the basis upon which it was seeking to amend had been known to it for at least 12 months;
• The abandonment of the trial would have deleterious effects on other litigants whose trial dates would have to be put back.

The Court found that adjourning the trial date and granting leave to amend would, in those circumstances, be contrary to the case management objectives of rule 21.

Chief Justice French was damning about the conduct of the proceedings and the decisions below:

4.  Save for the dissenting judgment of Lander J in the Court of Appeal, the history of these proceedings reveals an unduly permissive approach at both trial and appellate level to an application which was made late in the day, was inadequately explained, necessitated the vacation or adjournment of the dates set down for trial, and raised new claims not previously agitated apparently because of a deliberate tactical decision not to do so. In such circumstances, the party making the application bears a heavy burden to show why, under a proper reading of the applicable Rules of Court, leave should be granted.

5. In the proper exercise of the primary judge’s discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU’s statement of claim should not have been allowed. The discretion of the primary judge miscarried.

6. It appears that a factor in the decision of the primary judge and of the Court of Appeal was the decision of this Court in J L Holdings. That case arose out of an entirely different factual setting. However, to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative. For the reasons set out more fully below, I would allow the appeal. I agree with the orders proposed in the joint judgment[16].

But not as damning as Heydon J7:

156. Conclusion. The presentation and adjudication of the case in the courts below do cause it to merit a place in the precedent books. The reasons for placing it there turn on the numerous examples it affords of how litigation should not be conducted or dealt with. The proceedings reveal a strange alliance. A party which has a duty to assist the court in achieving certain objectives fails to do so. A court which has a duty to achieve those objectives does not achieve them. The torpid languor of one hand washes the drowsy procrastination of the other. Are these phenomena indications of something chronic in the modern state of litigation? Or are they merely acute and atypical breakdowns in an otherwise functional system? Are they signs of a trend, or do they reveal only an anomaly? One hopes for one set of answers. One fears that, in reality, there must be another.

Tracy Fantin

EQUITY CHAMBERS

Footnotes

1. [1997] HCA 1; (1997) 189 CLR 146 at 154 per Dawson, Gaudron and McHugh JJ.
2. The Court held that the application to amendment did not fall within rule 501, which requires the Court to make an all necessary amendments for the purposes of deciding the real issues in the proceeding, or correcting any defect or error in the proceeding or avoiding multiple proceedings.
3. 5 Philosophy—overriding obligations of parties and court

   (1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

   (2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

   (3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

   (4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.

   Example—

   The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court.

4. at [99]
5. at [133]
6. at [104] — [110]
7. The Court was also critical of the time taken by the Court of Appeal to deliver its judgment — nearly 6 months –  and by the Primary Judge to deliver his decision to grant leave to amend — of 11 months, the latter being described in the Joint Judgment as “deplorable”. 

 

Photo of Mount Stromlo Observatory by Enoch Lau

CIVIL APPEALS

O’Hara v Sims [2009] QCA 186 Keane JA Muir JA Fraser JA 10/07/2009

General Civil Appeal from the Supreme Court, Trial Division — Defamation — Actions for Defamation — Privilege — Qualified Privilege — The appellant (O’Hara) brought an action for damages for defamation against Sims arising out of a letter published by Sims to members of the Gold Coast Turf Club during the election for membership of the Club’s Committee — Sims’ letter concluded with the words “In my view this man is now unworthy of a position on our committee. I will not be voting for Brian O’Hara” — The jury concluded that the imputation that O’Hara had engaged in conduct making him unworthy to be a Committee member was not conveyed by the letter, and that other alleged imputations, including subordinating the due performance of his duty as a committee member to his interest in self promotion, were conveyed by the letter but were not defamatory — With consent of the parties, the trial judge then determined the issue as to qualified privilege and gave judgment for Sims — On Appeal — The jury was entitled to find that the letter was only Sims’ view that O’Hara did not deserve re-election to the committee — In relation to the alleged imputation that O’Hara subordinated the due performance of his duty as a committee member of the Club to his interest in self-promotion was defamatory, the jury’s finding must have concluded that O’Hara owed the club a duty — The jury’s finding that this imputation was not defamatory of O’Hara was one that no reasonable jury could make — Malice was not alleged against Sims — The conclusion that the publication was reasonable depended significantly upon the degree of seriousness of the defamatory imputations conveyed by the letter — It was open to the trial judge to conclude that the imputations should be characterised as being “anodyne”, in the sense that, if defamatory, they were nevertheless objectively unlikely to provoke a strong response — The characterisation of the imputations as lacking seriousness was soundly based on an objective assessment of the character of the imputations and the circumstances of their publication — HELD: Appeal dismissed with costs.

Munzer v Johnston & Anor [2009] QCA 190 McMurdo P Chesterman JA Douglas J 14/07/2009

General Civil Appeal from the Supreme Court, Trial Division — Torts — Negligence — Interference with Discretion of Court Below — Munzer was injured in a motorcycle accident involving Johnston — She brought an action for damages in negligence against Johnston and the RACQ, with whom Johnston had third party insurance — The appellants admitted liability however the quantum of damages was determined after a two day trial at $1,299,459.63 — Munzer was assessed as having a whole person impairment of 36 per cent — On Appeal — Common ground at trial and on appeal that Munzer was entitled to some home modification costs to meet her changed needs resulting from the injuries she received in the accident — The trial judge allowed for $90,000 for this head of damage, and considered that this amount fairly reflected the actual costs that Munzer would reasonably incur in providing appropriate accommodation adapted for her accident-caused disabilities — The primary judge’s method of assessing the costs of Munzer’s modified accommodation was somewhat unorthodox — Primary judge noted that it was common ground that Munzer needed a hydrotherapy pool constructed at her home — In total his Honour allowed $136,710 for costs associated with the pool — The judge was entitled to allow the cost of the purchase of a barn (for residential purposes) and its modification — Judge awarded $8,000 for the construction of the barn — No evidence led at trial of the costs associated with the construction — Trials are conducted on evidence and judges should not make “guesstimates”, even modest ones, in the complete absence of evidence — Error does not mean the appeal should be allowed — In the context of the overall award the amount of $8,000 is so small that, unless the appellants were successful in their other attempts to challenge the damages award, it would not justify this Court’s interference — Evidence that Munzer was a regular user of cannabis, however no evidence that she was a heavy user of methylamphetamine — Based on uncontradicted evidence from an occupational therapist his Honour adopted 15 hours per week as Munzer’s long term average requirement for care — No demonstration that his Honour’s approach to Munzer’s future care needs was flawed — HELD: Appeal dismissed with costs.

R v Ogawa [2009] QCA 201 Muir JA Fraser JA Wilson J 17/07/2009 (delivered ex tempore)

Appeal from Bail Application from the Supreme Court, Trial Division — Criminal Law — Bail — Revocation, Variation, Review and Appeal — Appeal by the Commonwealth Director of Public Prosecutions — Respondent (in this hearing) was convicted after trial of two counts of using a carriage service to harass and two counts of using a carriage service to make a threat — Ogawa sentenced to six months imprisonment on each count and ordered to be released after serving four months imprisonment subject to certain conditions — The learned trial judge in his sentencing remarks observed that Ogawa’s behaviour in court had been “disgraceful”, that she had not been legally represented and that her conduct had resulted in her exclusion from the court for most of the proceedings — Reference was also made to remarks by a psychiatrist having diagnosed Ogawat as having a personality disorder — A judge of the Supreme Court, Trial Division, granted Ogawa bail pending the hearing of the appeal — On Appeal — Ordinarily, in order to establish “exceptional circumstances” it will be necessary to show that “there are strong grounds for concluding that the appeal will be allowed” and that the appellant may be required to serve an unacceptable portion of his or her sentence before the appeal can be heard — In his summing up the learned trial judge highlighted the evidence of the persons against whom the threats were made by informing the jury that they “will understand that counts…focus to some extent on the evidence of those witnesses and that of [the Registrar of the Federal Court]” — The judge’s directions as to the elements of the offences of making threats were thus, arguably, tainted by the judge’s intimation that the evidence of the persons to whom the threats were directed was of relevance in determining whether the elements of the offences had been proved — The evidence, including evidence of the Registrar that he found the contents of one of the respondent’s emails “incredibly chilling” and in which he expressed his concern for the safety of residents of the university’s accommodation in which Ogawa was residing, was likely to have distracted the jury from focussing on the question of whether Ogawa had the requisite intention at the relevant time — It is thus strongly arguable that inadmissible and potentially highly prejudicial evidence was admitted and that the summing up included material errors — Another ground of appeal appears to have substance — It is to the effect that the learned trial judge failed to direct the jury that Ogawa’s statement that she “had a panic attack” was relevant to Ogawa’s intention at the time of the alleged threats — The evidence of Ogawa’s emotional and mental state at the time the alleged offences were committed were highly relevant to the jury’s determination of Ogawa’s intention for the purposes of the threat charges and relevant to the harassment charges having regard to the fault elements of intention and recklessness — There was evidence from witnesses that also supported a conclusion that Ogawa was in an unstable, and possibly deteriorating, mental state — The summing up by the trial judge was silent on the relevance of the evidence to the assessment of Ogawa’s state of mind — The trial judge treated the evidence in relation to “the panic attack” by directing that it was potentially an admission by Ogawa that she was the sender of the emails — There is thus an argument, particularly having regard to the lack of representation of Ogawa and, indeed, her absence from the trial, that insufficient was done by the trial judge to maintain a proper balance in the summing up by directing the jury’s attention to matters which may have been detrimental to the prosecution case but favourable to the accused’s — A summing up must be balanced and fair — Of course, it is impossible and also undesirable, to express any definitive views about this and most of the other grounds of appeal bearing in mind the nature of the appeal, the material before the Court and the limited extent of the argument — The Court’s conclusion based on limited material and brief argument, is that the prospects of some of the grounds of appeal are considerably greater than the primary judge thought — Of particular concern that the respondent may have been denied procedural fairness — HELD: Appeal dismissed.

Sequel Drill & Blast P/L v Whitsunday Crushers P/L [2009] QCA 218 Chief Justice Fraser JA Chesterman JA 31/07/2009

General Civil Appeal from the District Court — Contracts — Building, Engineering and Related Contracts — The Performance of Work — Time — Remedies — Appellant (Sequel) was to provide drilling and blasting services for the respondent (Whitsunday) — Trial judge found that Sequel was entitled to recover $50,590.99 from Whitsunday for this work completed under the contract, however the trial judge also found that Whitsunday was entitled to recover $48,696 from Sequel as damages for breach of contract leaving a net sum of $1,894.99 in favour of Sequel — The contract did not specify the number of blasts or “shots” to be performed by the appellant — Trial judge found that Sequel had breached its contractual obligation to Whitsunday by leaving the site before shot 8 was completed leaving Whitsunday with loss of shifts — No challenge to the trial judge’s finding that there was an implied term that Sequel would provide its services within a reasonable time — The written part of the contract did not define the scope of the work, so the issue turned on the oral parts of the contract — On Appeal — Evidence from Whitsunday’s senior project manager was accepted and not relevantly disputed that Sequel agreed to drill and blast as and when Whitsunday required rock to comply with its obligations to supply crushed rock to a third party — No effective challenge to the evidence that shot 8 was required — No evidence that Whitsunday, acting reasonably, could have caused shot 8 to be performed at an earlier time — Evidence that Whitsunday charged $5,170 to the third party for hiring to it some of the equipment that was claimed to have been costs that Whitsunday incurred during the period when it was not working due to the failure to complete shot 8 — HELD: Judgment varied by increasing the amount of the judgment in favour of Sequel by $5,170 to $7,064.99, otherwise the appeal dismissed.

Venz v Moreton Bay Regional Council (formerly Caboolture Shire Council) [2009] QCA 224 Muir JA Mullins J Philippides J 4/08/2009

 

Application for Leave to Appeal from the District Court (Civil) — Limitation of Actions — Extension of Time in Personal Injuries Matters — Venz alleged that he was injured on 14 August 2004 when he fell into an unfenced drainage culvert about which no warning signs were placed — He gave a Part 1 Notice of Claim pursuant to the Personal Injuries Proceedings Act 2002 (Qld) (PIPA) on 24 December 2004 — The Council (MBRC) denied liability — MBRC signed a form of consent order on 3 August 2007 that gave leave to Venz to initiate proceedings pursuant to PIPA with such proceedings to be filed by a specified date — A Claim and Statement of Claim were sent to the Court for filing on 9 August 2007 — The documents were returned to Venz’s solicitors the same day bearing a 9 August date stamp but no court seal — The primary judge held that Venz’s solicitors attempted to file the documents on 9 August 2007 and, by implication, that the attempt had failed — The documents were then filed on 23 June 2008 with sealed copies served on MBRC’s solicitors — On Appeal — No challenge that the filing of the documents was not effected within time — Primary judge was rightly concerned with the inadequacy of the evidence about the cause of the failure of the attempted filing but found that there was an attempt at filing — On the construction that was common ground all that resulted from the failure to file on or before the stipulated date was that Venz did not have leave to initiate proceedings or any continuing consent to the granting of leave and Venz had to make a fresh application for leave if he wished to commence the proceeding — Any breach of contract did no more than give MBRC the right to claim damages — The granting of leave to commence proceedings will result in no prejudice to MBRC beyond the loss of the limitations defence — HELD: Application and appeal allowed, Orders at first instance set aside, Leave to commence proceedings granted and costs.

Boss & Ors v Hamilton Island Enterprises Ltd [2009] QCA 229 Fraser JA Chesterman JA Wilson J 11/08/2009

General Civil Appeal from the Supreme Court, Trial Division — Landlord and Tenant — Covenants — Not to Assign or Sublet — Lessor’s Consent — Not to be Unreasonably Withheld etc — The appellant (HIE) hold a Perpetual Country Lease over the whole of Hamilton Island — In 1984 HIE contracted to a Mr George Harrison a sub-lease of 2.26 hectares of that land — Mr Harrison built a large and expensive house on his land — He died in 2001 and the sub-lease was assigned to the trustees of his estate — This sub-lease was subsequently replaced by one granted by HIE to the trustees in November 2007 on substantially the same terms but with a slight adjustment to the boundaries — The term of the sub-lease was for nearly 70 years with an option to renew the term for a further period of 99 years — The effect of s 121(1)(a)(i) of the Property Law Act 1974 (Qld) is that HIE’s consent to an assignment of the sub-lease is not be unreasonably withheld — In January 2008 the trustees contracted to sell the property for $8.5 million to Northaust subject to HIE’s consent to the assignment — HIE consented to the proposed assignment subject to conditions including that Northaust first execute a deed which would bind it to comply with an extensive set of regulations promulgated by HIE to govern the conduct of residents and others on the island (HIE’s regulations) — Northaust was not prepared to bind itself to comply with the regulations and HIE refused consent — The trial judge declared that HIE’s withholding of consent was unreasonable under the PLA — The trustees assigned the lease and the minister consented to the transfer — On Appeal — The trial judge was correct in concluding that HIE’s regulations would impose obligations upon the sub-lessee which substantially eroded the rights under the sub-lease, including by requiring that any building or further development be only as HIE permitted and by permitting HIE to refuse entry to the sub-lessees’ invitees or to have them removed from the island — In view of the substantial length of the term of the sub-lease and the option, it was likely that at least the sub-lessee would in fact seek to assign the sub-lease — The degree to which HIE’s regulations would impose upon the sub-lessee is unaffected by any provision of the agreement for lease — It depends only upon the proper construction of the terms of the sub-lease — It was HIE’s inflexible policy, rather than any reason personal to Northaust, which was the only justification for HIE’s insistence upon the condition that Northaust covenant to be bound by HIE’s regulations — In January 2008 the trustees’ solicitors wrote to HIEs employed solicitor seeking HIE’s consent to the proposed assignment of the sub-lease — On the same day HIE’s solicitor responded that its consent was subject to conditions including the execution of an enclosed deed and wrote “please note we will not accept any changes to this document” — HIE’s solicitor wrote in April on Northaust’s refusal to accept the deed that HIE reserved the right to refuse the assignment on the further grounds that Northaust was not respectable with this word meaning, inter alia “of fair social standing” — In summary HIE made it perfectly clear that regardless of the identity of the assignee HIE would only consent if the assignee covenanted to be bound by HIE’s regulations — HIE sought to obtain a substantially more advantageous contractual position than that upon which it had insisted at the time of the grant — HIE sought to deprive the sub-lease of its assignability — HELD: Appeal dismissed with costs.

 

Hedley Commercial Property Services P/L v BRCP Oasis Land P/L [2009] QCA 231 McMurdo P Chesterman JA Dutney J 14/08/2009

 

General Civil Appeal from the Supreme Court, Trial Division — Statutes — Operation and Effect of Statutes — In October 2007 the appellant (Hedley) and the respondent (BRCP) became parties to a Call and Put Option Deed (deed) the subject matter of which was vacant land described as ‘proposed Lot 203’ (‘the lot’) (what was originally Lots 788 and 21 which had reconfiguration approval from the Council to beome Lots 201, 202 and 203) — The deed conferred on Oasis a put option to require Hedley to purchase the lot by executing the contract if Hedley did not exercise the call option by the specified date — The price payable under the contract was $8,000,000 — The deed was obviously not a contract for the sale of the lot or anything else — It is an agreement, having the effect of a deed — Once the call or put option had been exercised, and the contract executed, a contract for the sale of property would have come into existence, but the deed was not such a contract — Primary judge declared that the subject matter of the deed was not residential property — On Appeal — The phrase “the development is other than for residential purposes” requires development to be for a purpose which is not residential — This construction has the result that such vacant land is residential property unless the approved development is for something that is not residential property, in which case it can be certain that a contract for the sale of the vacant land will not be one for residential property — Consent had been given pursuant to which a high rise tourist complex had been built and was operated on what became Lot 202 and what was originally part of Lot 788 — The consent was current when the parties executed the deed — No definition of “residence” or “residential” in PAMDA or IPA — The word must be given its ordinary meaning which requires the occupation must be “permanent or long-term” — The trial judge was correct in determining the development was not for residential purposes — The approval must have applied to the whole of both Lot 788 and Lot 21 — The whole of the area of both Lot 788 and Lot 21 was allowed to be used for the tall building “and ancillary uses” — Apparent that the approvals for the Oasis development did apply to the whole site as did a number of the conditions of that approval — The approved development was for other than residential purposes and was current when the option deed was executed by the parties — Section 17(3)(b)(ii) of PAMDA applied so that the contract was not a relevant one for the purposes of that Act — HELD: Appeal dismissed with costs.

 

Sevmere P/L v Cairns Regional Council & Anor [2009] QCA 232 McMurdo P Holmes JA Dutney J 14/08/2009

 

Planning and Environment Appeal — Planning Schemes and Instruments — Sevmere owns land in Cairns which it wishes to develop — In 2007 it made a development application (superseded planning scheme) — The Council gave an acknowledgment notice which stated that code assessment was required — The Department of Natural Resources and Water (DNRW) was identified as one of the two referral agencies for the application — Under the superseded planning scheme, all of the land to be developed had been contained in the Residential 3 zone — Under the existing planning scheme a portion was designated as “Area Zoned for Conservation” — The DNRW directed the Council to refuse that part of the development application which related to the conservation-zoned portion of the land but had no requirements for the remainder — Council approved the development with the exception of that part of it intended to take place on the land zoned for conservation — Council advised Sevmere that it would have approved the whole of the development but for the DNRW’s direction — Under s 5.4.2 IPA compensation is provided for land-owners where there has been a change in the planning scheme reducing the value of land to be developed — In the P&E Court Sevmere and the DNRW sought competing declarations as to which planning scheme applied to DNRW’s assessment of the application — Primary judge said that the right to compensation was highly conditional and referred to the clear meaning of s 3.3.15(1) of the IPA which referred to the “planning scheme in force, when the application was made” — On Appeal — The existing words of s 3.3.15(1)(b) will not bear either of the constructions for which Sevmere and the Council contend — The result they seek could only be achieved by addition of an exception to the section so as to remedy the omission to deal with the circumstance of a development application (superseded planning scheme) — The third limb of the Diplock test in Wentworth Securities Ltd v Jones [1980] AC 74 states “it was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law” — The third limb is not met in this case as it is not obvious that the words proposed (by Sevmere and the Council) are those which the legislature would have inserted had it considered the matter — The proposed alteration falls over the boundary of construction into legislation — HELD: Appeal dismissed with costs.

 

CRIMINAL APPEALS

R v Kelly [2009] QCA 185 McMurdo P Keane JA Jones J 10/07/2009

Sentence Application from the District Court — Grounds for Interference — Sentence Manifestly Excessive or Inadequate — Applicant (Kelly) pleaded guilty to one count of indecently dealing with a child with the circumstances of aggravation that she was under 12 and in his care — Sentenced to three months imprisonment suspended forthwith with an operational period of 12 months — Sentencing judge also held that Kelly should be subject to the restraints of a reportable offender — The child was a short-term resident at a child care facility run by Kelly and his then wife from their home — Kelly put his hand underneath the child’s underpants and briefly touched her on the vagina — The child was sleeping and unaware of the events — At sentence the child was oblivious to the fact that the offence had occurred — The incident was an isolated act — On Appeal — The judge wrongly fettered his sentencing discretion in considering that a custodial sentence, even if fully suspended, must be imposed — The remarkable concatenation of exceptional mitigating features in this case, including Kelly’s prior good history and subsequent complete and long-standing rehabilitation, complete cooperation and early plea and the absence of any harm at all to the child meant that unusually, the most appropriate sentence is a 12 month good behaviour bond — The offence to which Kelly pleaded guilty was, nevertheless, serious — The sentence falls within s 5(2)(b) of the Penalties and Sentences Act 1992 (Qld) and so Kelly would not be a reportable offender under the Act — HELD: Application granted, Appeal allowed, Sentence imposed at first instance set aside, Conviction recorded, Applicant released under a 12 month good behaviour bond.

R v Lenahan [2009] QCA 187 McMurdo P Fraser JA Jones J 14/07/2009

Appeal against Conviction and Sentence Application from the District Court — Verdict Unreasonable or Insupportable Having Regard to Evidence — Appellant (Lenahan) found guilty by a jury of 20 counts of fraud and sentenced to concurrent terms of five years imprisonment for the seven convictions of fraud of property of value of $5,000 or more and concurrent terms of two years imprisonment for the remaining 13 counts — A further order was made for the forfeiture of 15 cattle to the Commissioner of Police Queensland — Lenahan was the sole director of a company called Pacific Drive — Between March 2005 and February 2006 Lenahan spoke to each of the numerous complainants about buying cattle or other property, or acquiring services — In most cases no arrangement was concluded until a contract was made between the complainant concerned and the company, represented by Lenahan — On Appeal — Most counts concerned the sale of cattle — For each contentious count the evidence did not support a finding beyond reasonable doubt that a complainant parted with his or her cattle otherwise than pursuant to a contract for the sale of the cattle which identified the company as the buyer — On two counts the appellant conceded that the evidence supported conclusions that Lenahan had contracted personally with the complainants — The jury’s acquittal of Lenahan of five of the charges and the intelligent terms of their queries to the trial judge support the conclusion that Lenahan was not prejudiced by the inappropriate presence of many incompetent charges and much evidence directed only to those charges — Rejection of the substitution of verdicts under s 668F(2) of the Criminal Code 1899 (Qld) as a basic denial of justice — All but two of the convictions on Lenahan set aside, the Court is obliged to re-sentence — No orders sought in relation to the 15 head of cattle — HELD: Quash convictions and enter verdicts of acquittal on 20 counts, Dismiss the appeal from the convictions on two counts, Grant the application for leave to appeal against sentence and order that Lenahan not be punished in respect of those counts.

R v Beckett [2009] QCA 196 McMurdo P Fraser JA Cullinane J 17/07/2009

Appeal against Conviction from the District Court — Appellant (Beckett) was convicted of unlawfully doing grievous bodily harm to a patron of a nightclub — Beckett was in charge of security of the club — The patron suffered a fractured jaw outside the nightclub — Three others were working at the club at the time of the assault, Kuzmanovic, Power and Mailman — The Crown case that Beckett delivered the damaging blow was dependant on these co-employees — Prosecutor tendered a videotape which consisted of three segments — Defence counsel sought to have the third segment shown to the jury and submitted that the videotape showed the same group of club employees, excluding the appellant, within 20 minutes of the alleged assault acting in a similar sort of manner with another person — The trial judge directed the jury that this section of the tape was not relevant and that they should not have regard to it — On Appeal — The expressed purpose of defence counsel’s proposed cross-examination upon the videotape was, in summary, to elicit evidence that a very short time after and at much the same place as the violent assault of the patron alleged against Beckett whilst the three co-employees were present, the latter three club employees illustrated their propensity for violence of the kind charged against Beckett by their participation in a similar violent altercation with another patron of the club — Cross-examination was disallowed before any question was framed or asked — Not clear whether the evidence potentially might have demonstrated a “striking similarity” with the assault of which Beckett was accused – The trial miscarried because the trial judge prevented defence counsel from exploring a legitimate line of cross-examination of a critical Crown witness — HELD: Appeal allowed, Quash the conviction, Order a new trial.

R v Gordon; ex parte Cth DPP [2009] QCA 209 Chief Justice Keane JA Wilson J 24/07/2009

Sentence Appeal by Cwth DPP from the District Court — Procedure — Notices of Appeal — Time for Appeal and Extension Thereof — On 4 February 2009 the respondent (Gordon) was convicted of his own plea of guilty to counts of using a carriage service to access child pornography material and child abuse material (Commonwealth offences) and to knowingly possessing child exploitation material (Queensland offence) — For each of the Commonwealth offences Gordon was sentenced to 12 months imprisonment to be released forthwith on a good behaviour bond — Gordon is a qualified pharmacist, married and his wife is supportive of him — On Appeal — The DPP said that the delay in question was only six days and that there was no reason to think that Gordon had suffered any prejudice by reason of this brief delay — The only reason put forward by the DPP to explain the delay in filing the notice of appeal is that the learned sentencing judge’s sentencing remarks were not provided to the DPP until 19 February 2009 — No explanation why the notice of appeal was not filed until 10 March 2009 — No evidence that the DPP’s officers were unable to make the necessary assessment of the merits of an appeal during the period between 19 February 2009 and 4 March 2009 (the time for the filing of the notice of appeal) — Respectfully of the opinion that his Honour’s approach was erroneous in that his Honour proceeded on the footing that the five year maximum penalty under the Criminal Code 1899 (Qld) should be regarded as fixing the relevant maximum — Not persuaded that the error is of such seriousness as to warrant the exercise by this Court of its discretion to expose Gordon to double jeopardy — The explanation for the delay by the DPP in instituting this appeal is unsatisfactory — No good reason has been shown for the Court to override the need for finality in the administration of justice and expose the respondent to double jeopardy — HELD: Application refused, Notice of appeal struck out.

R v Ottley [2009] QCA 211 Holmes Muir JJA Dutney J 24/07/2009

Appeal against Conviction and Sentence from the District Court — Appellant (Ottley) was convicted after trial of one count of torture (count 1), three counts of assault occasioning bodily harm, one count of dangerous operation of a vehicle (count 5), once count of deprivation of liberty and one count of grievous bodily harm — Ottley was acquitted of other criminal offences including unlawful assault and rape — Learned judge in sentencing accepted that the offences were committed over a limited period of approximately one month and that the relationship with S was a difficult one — She was an alcoholic, had significant mental health issues, abused alcohol and prescription drugs and took illicit drugs — Ottley was effectively sentenced to six years imprisonment as all sentences were to be served concurrently, disqualified from holding or obtaining a driver’s licence for a period of two years and declared to be convicted of serious violent offence in respect of counts 1 (torture) and 9 (unlawfully doing grievous bodily harm) — S, the victim, gave evidence at trial — She had long-standing problems with alcohol use and was diagnosed, on her account, as manic depressive — On Appeal — Ottley was self-represented on appeal — The verdicts were open to the jury on the evidence; they were not unreasonable — Ottley was preoccupied with the conviction appeal and did not assist in submission in relation the application for leave to appeal against sentence — The factual circumstances of the cases of R v HAC [2006] QCA 460 and R v B; ex parte A-G [2000] QCA 110 were significantly worse than what was involved here — There was no use of, in this case, of weapons and nor was there the degree of calculated sadism and perversion involved in HAC — Ottley’s conduct seemed to have been more a series of angry responses in a relationship involving some very considerable pressures — A proper starting point for acts of the type involve here might have been between five and seven years, if a serious violent offence declaration were to be imposed — The mitigating factors, such as they were, and, more particularly, the pressures the sentencing judge identified in the volatile relationship, a sentence at the lower end of that range should be imposed — HELD: Appeal against conviction dismissed, Application for leave to appeal against sentence allowed, On count 1 sentence of five years imprisonment with a serious violent declaration substituted, Sentence on count 5 affirmed, Conviction on counts 4,6,7,8 and 9 affirmed, but sentences imposed on each of those counts set aside, with no further penalty imposed.

R v Chinmaya [2009] QCA 227 McMurdo P Fraser JA Wilson J 7/08/2009

 

Sentence Application from the Supreme Court, Trial Division — Grounds for Interference — Sentence Manifestly Excessive or Inadequate — Chinmaya convicted on his pleas of guilty of possession of the dangerous drugs methylamphetamine and MDMA with a circumstance of aggravation that the quantity of the dangerous drug exceeded two grams — The learned sentencing judge recorded convictions and sentenced Chinmaya to concurrent terms of 12 months, with parole release date on 26 August 2009 after he had served three months — Chinmaya’s offending had come to the knowledge of police officers on 11 December 2007 when they conducted a search of the residence where he was then living with a number of other people — The police found in the bedroom occupied by him clip-seal bags containing speed and ecstasy tablets — In a cupboard in an adjoining bedroom the police found a plastic container containing a clip-seal bag which held 88 tablets containing 6.027 grams of pure MDMA — The sentencing judge observed that Chinmaya’s plea of guilty in respect of the 88 tablets caused some difficulty as he claimed he did not know they were present in that room — The bedroom had been previously occupied by Chinmaya’s girlfriend — Women’s shoes were found in the cupboard where the tablets were found, the room was apparently unoccupied and undergoing some renovation, the plastic container contained residue of a female person’s cosmetic and Chinmaya’s fingerprints were not found on either receptacle — The sentencing judge accepted that the independent evidence made it clear that the Chinmaya did not have knowledge of the presence of the tablets, however he was in control of the premises where the drugs were found — On Appeal — The learned sentencing judge attributed particular significance to the conclusion that Chinmaya had used the schedule 1 drug methylamphetamine whilst he was employed as a security officer — Chinmaya was employed in his own business as a removalist and involved in security work — At the sentence hearing there was no suggestion that Chinmaya had used methylamphetamine and there was no challenge to his assertion that the very small quantity of methylamphetamine found in his bedroom was not his — References were tendered which included statements that he was a respected and liked employee and these offences were out of character — This Court obliged to exercise the sentencing discretion afresh — The appropriate inferences were that Chinmaya and others jointly purchased the tablets for their personal use, someone other than Chinmaya mislaid them for quite a long time before the police found them and Chinmaya did not know that they were in the house — Chinmaya had never been imprisoned, had no prior convictions for drug offences and pleaded guilty — No commercial element in Chinmaya’s possession of the drugs and rehabilitation loomed large as an important factor — HELD: Deterrent sentence is met by recording a conviction and imposing a head sentence of twelve months’ imprisonment with immediate parole.

 

R v Keenan [2009] QCA 236 McMurdo P Keane JA Fraser JA 21/08/2009

 

Sentence Application from the Supreme Court, Trial Division — Grounds for Interference — Sentence Manifestly Excessive or Inadequate — Keenan was convicted upon jury verdict of doing grievous bodily harm with intent to do grievous bodily harm and acquitted of attempted murder — The Crown case was that Keenan, his two co-accused, and another man were parties to a plan to exact revenge on Coffey who had misappropriated $6,000 or $7,000 due to Keenan for illicit drugs delivered by Coffey to a purchaser at Keenan’s request — Once Coffey was located, Keenan and his companions ambushed him, and a co-accused fired five shots at the fleeing Coffey, rendering him irreversibly paraplegic — There was no evidence that the use of a gun had been discussed with Keenan — One of the companions was armed with a baseball bat and Keenan had sent text messages to Coffey’s female companion threatening them with serious physical violence — At the time of the offence Keenan was 32 years old and had a serious history of criminal activity including crimes of violence — On Appeal — Keenan organised the attack on Coffey — This was done with a view to inflicting grievous bodily harm on Coffey as a piece of gangland discipline — Coffey was pursued by Keenan with a fixed and cold-blooded determination — Keenan’s criminal history could legitimately be taken into account to show that Keenan has manifested in the commission of this offence a continuing attitude of disobedience of the law so as to indicate the need for a more severe sentence in the interests of deterrence and protection of society — HELD: Application refused.

 

R v Carlton [2009] QCA 241 McMurdo P Chesterman JA Mullins J 28/08/2009

 

Sentence Application from the District Court — Grounds for Interference — Carlton pleaded guilty to four counts of distributing child exploitation material and one count of possessing child exploitation material — Carlton was sentenced on 10 December 2008 to three years imprisonment with parole eligibility fixed after he had served 12 months — On Appeal — The principal question raised by this application was whether the amendments to the Penalties and Sentences Act 1992 (PSA) which came into effect on 1 December 2008 which came into effect on 1 December 2008 applied to the Carlton’s sentencing — The insertion of sections 9(6A) and 9(6B) set out the principles applicable when judicial officers exercise their sentencing discretion, and in effect removes the application of a term of imprisonment being a last resort for these particular offences — Two reasons for applying the subsections to Carlton at sentence — Firstly, the matter of R v Truong [2000] 1 Qd R 663 has been regarded as authoritative and followed, in particular the Court holding that Truong was to be sentenced according to the Act as it was at the time of the sentence — “It may generally be taken that a procedural statute is, in the absence of an indication to the contrary, to be construed as retrospective, that is to say that its application may relate to past events.”: from Truong — Secondly, s 204 PSA read in conjunction with s 14H(1) of the Acts Interpretation Act 1954 (Qld) requires that the Act as it is at the time of sentence is to be applied — This application is concerned with amendments to s 9 not with any provision which has increased penalties for the offences committed by Carlton — Section 9 PSA seeks to regulate the manner in which the discretion is to be exercised by an identification and weighting of factors to be taken into account and balanced out — A change to the factors, or a reordering of their priorities is not properly described as changing a substantive law — It affects only the manner in which judges go about exercising the discretionary power of sentencing — The distribution of material is a serious aspect of Carlton’s offending — Carlton distributed a very large number of appallingly depraved images — HELD: Application refused.

 

R v Pham [2009] QCA 242 Keane JA Chesterman JA Wilson J 28/08/2009

 

Sentence Application from the District Court — Grounds for Interference — Sentence Manifestly Excessive or Inadequate — Pham pleaded guilty to one charge of distributing, one charge of possessing and two charges of knowingly possessing child exploitation material — Pham was sentenced to two years imprisonment to be suspended after six months with an operational period of two years — On Appeal — Sections 9(6A) and 9(6B) of the Penalties and Sentences Act 1992 (Qld) lay down the principles to be applied by the Court when sentencing an offender — These provisions inform the exercise of the sentencing discretion: they are not concerned to authorise the imposition on an offender of punishment to any particular extent, much less to any greater extent than was authorised by the former law — The extent of the punishment authorised for a given offence is determined by legislation other than s 9 of the PSA — The application of the sentencing principles as amended will not result in the imposition of punishment to a greater extent than might have been imposed prior to the amendment in question — Here, imprisonment was an appropriate penalty — The determination of the duration of imprisonment depended on factors wholly unconnected with the question whether imprisonment should be ordered at all — Given the nature of the offence, the applicable maximum penalty, Pham’s criminal history and the fact that the offences were committed while on parole the reasonableness of the sentence cannot be doubted — HELD: Application refused.

 

R v DAU; ex parte A-G (Qld) [2009] QCA 244 Holmes JA Mullins J Philippides J 28/08/2009

 

Sentence Appeal by A-G (Qld) from the Childrens Court — Grounds for Interference — Sentence Manifestly Excessive or Inadequate — DAU, a juvenile, pleaded guilty to one count of rape and sentenced to two years detention, to be released after serving 50 per cent, with no conviction recorded — DAU struck the complainant’s face three times and forced the complainant to perform oral sex on him — His Honour noted the serious impact of the offence on the complainant and her family — In DAU’s favour were his early plea of guilty, his remorse and favourable content of the pre-sentence report — Against him were the gratuitous violence involved in the offence, taken with the offence itself, warranted actual detention despite his youth — On Appeal — Authorities relied on by the appellant contained more serious factual circumstances — In this case the learned sentencing judge in setting the head sentence at two years detention, gave the least sentence proper in the circumstances of the case; and in doing so, he met the statutory requirement that the “shortest appropriate” period of detention be imposed: s 150(2)(e) Juvenile Justice Act 1992 (Qld) — DAU had committed a less serious offence than the authorities relied on by the appellant, had no previous criminal history, and had prospects of rehabilitation likely to be affected by a conviction — HELD: Appeal dismissed.

Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 (5 August 2009) Three days into a four week trial the Australian National University (ANU) sought an adjournmentin order to make an application to the Supreme Court of the Australian Capital Territory to amendits statement of claim against its insurance broker significantly, Aon Risk Services Australia Ltd

The primary judge granted the adjournment and leave to amend. The ACT Court of Appeal dismissed an appeal against that decision except in relation to costs. The High Court has allowed an appeal against the decision of the Court of Appeal. The bushfires in and around Canberra in January 2003 destroyed property belonging to ANU at its Mt Stromlo complex. In December 2004, ANU commenced proceedings against three insurance companies claiming indemnity for the Mt Stromlo losses. It subsequently joined Aon to th proceeding, claiming that it had acted negligently in failing to renew insurance over certain ANU properties

A four week trial was listed to commence on 13 November 2006. On that day, ANU and two of the three insurance companies commenced mediation which led to the settlement of ANU’s claims against them. ANU also settled its claim against the third insurance company. Those three claims having been resolved, ANU sought an adjournment of the trial on the basis that certain events that occurred and information received before and during the mediation made it necessary to seek leave to amend its statement of claim against Aon. Despite Aon’s opposition, the primary judge granted the adjournment and also granted ANU leave to amend its claim against Aon substantially. A majority of the Court of Appeal dismissed Aon’s appeal against the primary judge’s orders but ordered ANU to pay costs to Aon arising out of the amendment on an indemnity basis. The High Court granted Aon special leave to appeal. All members of the Court considered the proposed amendments did not fall into the category of amendments to which Rule 501 of the Court Procedure Rules 2006 (ACT) applied, that is, amendments which were required to be made for the purpose of deciding the real issues in the proceeding, or for the purpose of avoiding multiple proceedings. Rule 502 was the applicable rule.

It required the Court to exercise its discretion in deciding whether to grant leave to ANU to make the amendments. Taking into account the objects and purposes of the Rules as set out in Rule 21, matters relevant to the exercise of the discretion would include, but not be limited to, the extent of the delay in seeking to amend, and the costs associated with that delay; prejudice to the opposing party if leave were to be granted; the nature and importance of the amendment to the party applying; the point the litigation had reached, relative to the trial commencement date; prejudice to other litigants awaiting trial dates; and the proposing party’s explanation for the delay in applying for the amendment. To the extent that statements in the case of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 suggested only a limited application for case management principles in determining applications for leave to amend, the Court held that such statements should not be applied in the future.

The High Court held that the primary judge and the majority in the Court of Appeal had not had sufficient regard to the following salient features of ANU’s application for leave to amend: it sought to introduce new and substantial claims which would require Aon to prepare a new defence as if from the beginning; the application was brought during the time which had been set for trial and would result in the abandonment of the remaining scheduled weeks of trial; it was not clear that even an order for indemnity costs would overcome the prejudicial effects on Aon; and ANU had offered no explanation about why the case had been allowed to proceed to trial in its existing form when the basis upon which it was now seeking to amend had been known to it for at least 12 months. The abandonment of the trial date would also have had deleterious effects on other litigants whose trial dates would have to be put back. In the Court’s view, adjourning the trial date and granting ANU leave to amend in the circumstances of this case was contrary to the case management objectives set out in Rule 21 of the Rules.

The High Court allowed Aon’s appeal and ordered that ANU’s application for leave to amend its statement of claim be dismissed

ACQ Pty Limited v Cook; Aircair Moree Pty Limited v Cook [2009] HCA 28 (5 August 2009) The High Court has dismissed appeals by ACQ Pty Ltd and Aircair Moree Pty Ltd, the owner and operator of a crop-dusting aircraft. They had appealed against findings that they were liable for damages to Gregory Cook for serious injuries he suffered when he received an electric shock from a power line knocked down by the aircraft.   On 28 December 2000 the aircraft was crop dusting a cotton field over which a high voltage conductor hung at a height of at least 6.2 metres. During the flight the aircraft struck the conductor. It was dislodged from its supporting pole and left hanging about 1.5 metres above the ground. The responsible energy company (at the time — NorthPower; now known as Country Energy) sent two employees — Mr Cook and Mr Buddee — to deal with the dislodged conductor. The two men agreed that Mr Buddee would drive to a links site about seven kilometres away and isolate the conductor, after which Mr Cook would commence an assessment of the situation in the cotton field. Despite this Mr Cook entered the field before the conductor had been isolated. The ground in the field was uneven and very boggy. Mr Cook stumbled in the muddy conditions. He fell close to the conductor, received an electric shock and was badly injured.

Section 10 of the Damage by Aircraft Act 1999 (Cth) (DAA) provides that both the operator and the owner of an aircraft are liable if a person suffers an injury caused by, amongst other things, something that is the result of an impact with an aircraft that was in flight immediately before the impact happened. The effect of section 11 of the DAA is that damages are recoverable from both the owner and the operator of the aircraft in respect of an injury to which section 10 applies without the injured person having to prove that the injury had been caused by the owner’s and the operator’s wilful actions, negligence or default.   Mr Cook sued both ACQ and Aircair for damages pursuant sections 10 and 11 of the DAA. He was successful before the primary judge in the District Court of New South Wales, who awarded him damages of $953,141.00. The Court of Appeal of the Supreme Court of New South Wales dismissed ACQ’s and Aircair’s appeals. The High Court granted both ACQ and Aircair special leave to appeal.   The appeals raised the issue of what had “caused” Mr Cook to suffer injury. ACQ and Aircair acknowledged that Mr Cook would not have been in the field except for the fact that the aircraft impacted the conductor and dislodged it. However they argued that, even though the dislodged conductor was potentially unsafe, there would have been no danger to Mr Cook if he had not voluntarily departed from his agreement with Mr Buddee to do nothing until the conductor had been isolated. While they did not argue contributory negligence, ACQ and Aircair submitted that there was not a close enough temporal, geographical and relational connection between the dislodgement of the conductor and the injuries Mr Cook suffered.

In a unanimous decision the High Court rejected these arguments. The Court considered it did not strain the language of the DAA to characterise the events following the impact of the aircraft with the conductor as having “caused” Mr Cook’s injuries. The Court concluded that Mr Cook’s injuries were caused by the dangerous position of the conductor. The conductor was in a dangerous position because the aircraft had struck it. The High Court dismissed both appeals and ordered ACQ and Aircair to pay Mr Cook’s costs of the appeals. Lane v Morrison [2009] HCA 29 (26 August 2009) The High Court has determined that Colonel Peter Morrison, a Military Judge, may not proceed with trying charges against Mr Brian Lane, a former member of the Royal Australian Navy (RAN), because the legislation creating the Australian Military Court, in which the charges were to be heard, is constitutionally invalid.

Mr Lane was a member of the RAN before transferring to the Naval Reserve on 14 March 2007. On 8 August 2007 he was charged with offences alleged to have occurred in August 2005 when he was still a member of the RAN. He was discharged from the Naval Reserve with effect from 3 September 2007. On 26 November 2007 the Chief Military Judge of the Australian Military Court (AMC) nominated Colonel Morrison to try the charges against Mr Lane. When the matter first came before the AMC on 25 March 2008, Mr Lane objected to the jurisdiction of the AMC. In May 2008 he filed an application in the High Court seeking an order prohibiting Colonel Morrison from hearing the charges, and a declaration that the provisions of the legislation which created the AMC are invalid.

The AMC was created by the insertion of new provisions into the Defence Force Discipline Act 1982 (Cth), to replace the system of courts-martial which had previously existed.  The new provisions state that the AMC is a court of record, and that it consists of a Chief Military Judge and such other Military Judges as hold office from time to time in accordance with the Act. A Note to section 114 of the Act specifically states the AMC is not a court for the purpose of Chapter III of the Constitution.

Having regard to the attributes of the AMC and the way in which it operates, the Court concluded that the legislation requires the AMC to exercise the judicial power of the Commonwealth, without being set up as a court established under Chapter III of the Constitution (in which the power to create the federal judiciary is contained). For that reason the legislation creating the AMC was invalid.

The High Court ordered that a writ of prohibition should issue, prohibiting Colonel Morrison from proceeding with the charges against Mr Lane, and made a declaration that Division 3 of Part VII of the Defence Force Discipline Act 1982 (Cth), which created the AMC, was invalid.

Minister for Immigration and Citizenship v SZLFX [2009] HCA 31 (26 August 2009) The High Court has held that the Refugee Review Tribunal (RRT) may, under section 424(1) of the Migration Act 1958 (Cth), get information, relevant to a review, by telephone without first sending a written invitation. Procedural restrictions on the specific power to invite a person to give additional information contained in sections 424(2) and (3), and 424B of the Act do not apply to the general power, contained in section 424(1) of the Act, to get any information the RRT considers relevant.

The Minister’s appeals in relation to SZKTI and SZLFX were heard together by the High Court because both cases concerned the issue of whether the RRT may obtain information by telephone from a person without writing to that person to invite him or her to provide the information.

SZKTI arrived in Australia on 23 April 2006 and applied for a protection visa one month later. He claimed to fear persecution in China because he is a member of a religious group which the Chinese Communist Party refers to as the ‘Shouters’, but which its members call the ‘Local Church’. He alleged that if he returned to China he would be arrested because of his membership of the Local Church. The Minister’s delegate refused to grant SZKTI a protection visa and he applied to the RRT for review of the delegate’s decision. SZKTI provided information concerning his membership of the Local Church in Australia to the RRT, including mobile phone contact details for an Elder of the Local Church. The RRT rang the Elder and obtained certain information which, in the RRT’s view, tended to indicate that SZKTI had not been an adherent of the Local Church in China and had only commenced attending the Local Church following his arrival in Australia. The RRT notified SZKTI of the information provided by the Local Church Elder and the preliminary conclusions the RRT had drawn from it, and invited SZKTI to comment on the information. Having considered the evidence, including SZKTI’s response to the invitation to comment, the RRT affirmed the delegate’s decision to refuse the protection visa. A Federal Magistrate dismissed SZKTI’s appeal, however the Full Court of the Federal Court allowed an appeal and ordered the RRT to reconsider the original application for review. The High Court granted the Minister special leave to appeal.

SZKTI argued that, when obtaining the information from the Local Church Elder, the RRT was obliged by sections 424(2) and (3), and 424B of the Act to give, in one of the ways specified in section 441A of the Act, a written invitation to the Elder to provide the requested information. He argued that when the RRT obtained the information via a phone call, it failed to comply with those obligations. The High Court however accepted the Minister’s submissions that section 424(1) of the Act empowered the RRT to “get any information” that it considered relevant without limiting the ways in which the RRT might get the information. Section 424(2) was concerned with how information should be obtained in the specific circumstance when a person was “invited … to give additional information”.

In the view of the Court the RRT, when it called the Local Church Elder to make enquiries about SZKTI, had not breached its obligations in relation to the way in which it may obtain information. The Court also held that the information provided by the Local Church Elder did not raise new issues requiring a further hearing under section 425 of the Act. The High Court allowed the Minister’s appeal and reinstated the RRT’s decision to affirm the decision to refuse SZKTI’s application for a protection visa.

SZLFX arrived in Australia on 16 October 2002, on a student visa. He was arrested in March 2007 because his student visa had expired. SZLFX applied for a protection visa on 10 April 2007, claiming to fear persecution if he returns to China because he is a Falun Gong practitioner. In his application SZLFX described having started to practise Falun Gong with a group of practitioners every morning in Belmore Park in Sydney in January 2005. He stopped practising for a period but took it up again and continued to practise thereafter. The Minister’s delegate refused to grant SZLFX a protection visa and SZLFX applied to the RRT for review of the delegate’s decision. Before the RRT hearing an RRT employee telephoned regarding Belmore Park Falun Gong activities and filed a note recording the details of the call. SZLFX was not notified of the existence of the file note. The RRT affirmed the delegate’s decision, however a Federal Magistrate allowed SZLFX’s appeal. The Full Court of the Federal Court followed the Full Court’s decision in SZKTI v Minister for Immigration & Citizenship concerning the RRT’s obligation to obtain information in the manner set out in sections 424(2) and (3), and 424B of the Act and dismissed the Minister’s appeal. The Minister sought and obtained special leave to appeal to the High Court.

For the reasons set out in relation to the case of SZKTI, the Court held that the RRT had not breached its obligations in relation to the way it obtains information. The Court also held that the RRT had not breached section 424A of the Act in respect of giving notice of adverse information. The High Court allowed the appeal and reinstated the RRT’s decision to affirm the delegate’s refusal of a protection visa for SZLFX.

Bruton Holdings Pty Limited (in liquidation) v Commissioner of Taxation [2009] HCA 32 (26 August 2009) Today the High Court held that the Commissioner of Taxation could not recover part of a tax debt owing by a company in liquidation by requiring payment from the company’s solicitors of monies held in trust for the company.  The Commissioner had issued a notice to the solicitors under section 260-5 in Schedule 1 of the Taxation Administration Act 1953 (Cth) requiring payment of money which had been paid into their trust account by the company Bruton Holdings Pty Ltd.

Bruton Holdings was incorporated on 27 May 1997, solely to act as trustee of the Bruton Educational Trust. The Commissioner of Taxation refused Bruton’s application for endorsement as a tax exempt entity in April 2006, and Bruton commenced proceedings challenging the refusal.  It retained a firm of solicitors, Piper Alderman, to act on its behalf and paid approximately $470,000 into the Piper Alderman trust account in respect of the costs and disbursements of the litigation.  On 28 February 2007 the Directors of the company appointed administrators.

The appointment of the administrators immediately terminated Bruton’s trusteeship of the Bruton Educational Trust.  No replacement trustee was appointed.  On 26 March 2007 the Commissioner issued to “the Trustee for Bruton Educational Trust” a notice of assessment for $7,715,873.73 in respect of its tax liability for the 2003/04 financial year.  On 30 April 2007 the creditors of Bruton Holdings resolved to place the company into voluntary liquidation. The administrators of Bruton Holdings were appointed liquidators.  The Commissioner lodged a formal proof of debt in the winding up for the amount of the assessment issued on 26 March 2007.

On 8 May 2007 the Commissioner issued a notice under section 260-5 of the Taxation Administration Act to Piper Alderman, requiring the firm to pay to the Commissioner the amount of $447,420.20 held in its trust account to the credit of Bruton Holdings.  Bruton Holdings sought declarations in the Federal Court that the notice issued under section 260-5 was void, arguing that section 500(1) of the Corporations Act 2001 (Cth) invalidated it. Bruton Holdings was successful before the primary judge, but the Full Court of the Federal Court allowed the Commissioner’s appeal. The High Court granted Bruton Holdings special leave to appeal.

The High Court held that the Commissioner could not use section 260-5 in relation to the debts of a company in liquidation.  In the Court’s view, section 260-45 of the Taxation Administration Act provides a specific regime for the collection and recovery of tax liabilities of such companies by requiring liquidators to set aside from available assets of the company, an amount sufficient to pay the Commissioner the amount recoverable as an unsecured creditor in the liquidation.  The provisions of section 500 of the Corporations Act, which would invalidate any attachment on the property of a company in liquidation, support the view that section 260-5 does not apply to the recovery of debts owing to companies in liquidation.  Were that not the case section 260-5 would have been in conflict with section 500.

The High Court allowed Bruton Holdings’ appeal and ordered that the Commissioner’s appeal to the Full Court of the Federal Court be dismissed with costs.

Clarke v Commissioner of Taxation [2009] HCA 33 (2 September 2009)

The Commonwealth’s attempt to impose a surcharge tax on members of State parliaments, based on their notional entitlements under defined benefit superannuation schemes, was constitutionally invalid, the High Court has held.

Ralph Clarke was elected to the South Australian Parliament in 1993. He served as a member of parliament from 11 December 1993 until 8 February 2002. Mr Clarke was a member of three state superannuation schemes: the Parliamentary Superannuation Scheme (PS Scheme); the Southern State Superannuation Scheme (SSS Scheme); and the State Superannuation Benefit Scheme which was rolled into the SSS Scheme under South Australian superannuation scheme merger legislation.   Between February 2000 and February 2005 the Commissioner of Taxation issued superannuation contribution surcharge assessments to Mr Clarke, pursuant to the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) (the Imposition Act) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) (the Assessment Act). Mr Clarke’s objections to the assessments were disallowed by the Commissioner. He applied to the Administrative Appeals Tribunal (AAT) for review of the Commissioner’s decisions and the AAT referred questions of law, including a question about the constitutional validity of the Imposition Act and the Assessment Act, to the Full Court of the Federal Court. The Full Court held that both Acts were valid. The High Court granted special leave to Mr Clarke to appeal the decision of the Full Court.   The Imposition Act and the Assessment Act applied to “constitutionally protected funds” which included the schemes of which Mr Clarke was a member. Liability was imposed on a fund member if the member’s adjusted taxable income exceeded a defined threshold amount. (South Australian state parliamentarians fell within this group.) The two Acts obliged fund members to pay amounts calculated on the basis of notional contributions that bore no necessary relation to the pension he or she would actually receive. Potentially the benefits received could be less than the amounts assumed in the calculation of the surcharge. Also, the tax accrued, compounding at market interest rates, until the member actually received his or her superannuation benefits. Potentially the tax due could approximate the whole of the pension due in the first year of receipt. To ameliorate these potential effects the South Australian government passed legislation whose general aim was to ensure that persons with an accumulated surcharge debt with the Australian Taxation Office had at retirement a method of obtaining a lump sum to expunge the debt with the ATO.   The High Court concluded that the Constitution recognises the States as independent entities and will not support laws which impair or interfere with the capacities or functions conferred on the States or which inhibit the execution of their constitutional powers. The Court found that the Imposition Act and the Assessment Act were not laws of general application, but rather laws which placed a special disability or burden on the States in relation to the way in which they remunerated members of State parliaments. Remuneration of members of parliament, as one aspect of the capacity to fix terms and conditions of those elected to parliament, is critical to each State’s capacity to function as a government. The Court determined that for these reasons, both the Imposition Act and the Assessment Act were beyond the legislative power of the Commonwealth and made orders reflecting that determination.

Visscher v The Honourable President Justice Giudice [2009] HCA 34 (2 September 2009)

The High Court has  held that the Australian Industrial Relations Commission must reconsider Mr Visscher’s application for wrongful termination.  The Commission had held that he had not been demoted from the position of Chief Officer in early 2004, because his earlier promotion to that position in September 2001 had been rescinded by his employer shortly thereafter.  The High Court held by a 4-1 majority that general principles of contract law applied to the employee’s actions and required Mr Visscher to have accepted the employer’s repudiation before the contract came to an end.  The AIRC had not determined the matter according to those principles.   A Full Court of the Federal Court also upheld the AIRC’s decision on the basis that Mr Visscher’s status fell to be determined according to the Certified Agreement.  The High Court, by majority, held that that was not a subject dealt with in the Agreement.   Mr Visscher was employed with Teekay Shipping (Australia) Pty Limited.  In September 2001 he was promoted from the position of Third Mate to the position of Chief Officer.  Teekay gave Mr Visscher notice, some days later, that the promotion was rescinded.  However, Mr Visscher continued to perform the duties of a Chief Officer and receive a salary equivalent to that of Chief Officer until early 2004.  At that time, according to Mr Visscher, Teekay asked him to sail as a Second Mate.  He considered this to be a demotion and subsequently treated this request as a termination of his employment.   A Certified Agreement between Teekay and the Australian Maritime Officers Union which came into effect in early 2002 listed Mr Visscher’s position as being that of Third Mate.   The AIRC proceeded upon the basis that the rescission of Mr Visscher’s promotion was effective to terminate his contract of employment as Chief Officer.  This meant that Mr Visscher could not have been demoted from that position in early 2004.  The Full Court of the Federal Court upheld this finding on the basis that contracts of employment, as contracts for personal service, have some special features.  One of these was that the employment relationship may be effectively discharged by the employer’s wrongful termination of the contract of employment, even if the employee remained in employment.  The Full Court also held that, in any event, Mr Visscher’s interests were subordinated to the “superior legal force” of the Certified Agreement, which listed him as a Third Mate.   The High Court, in allowing the appeal, confirmed that general contractual principles applied in the present case.  This meant that Teekay’s repudiation, in rescinding Mr Visscher’s promotion, would not of itself be effective to terminate his contract of employment as Chief Officer.  Mr Visscher must have first accepted the repudiation.  Whilst the High Court did not have the necessary facts before it to determine whether Mr Visscher had in fact accepted Teekay’s repudiation, the majority noted that silence on the part of Mr Visscher would not necessarily amount to acceptance, or some form of estoppel.  There would likely need to be some sort of obligation to speak, and evidence that Teekay acted to its detriment on the basis of Mr Visscher’s conduct.   In regard to the Certified Agreement, the majority of the High Court held that it did not display an intention to alter the position of employees held at the time the Certified Agreement came into force.  Rather, the reference to employees’ positions in the Certified Agreement was to assist in determining future promotions and transfers.   The High Court remitted the matter to the AIRC for reconsideration

Leighton Contractors Pty Ltd v Fox; Calliden Insurance Limited v Fox [2009] HCA 35 (2 September 2009)

There is no common law duty requiring a principal contractor to provide to a subcontractor training in the safe methods of carrying out the subcontractor’s specialised task, the High Court has held.   Leighton Contractors Pty Ltd was the principal contractor for the Hilton hotel construction project in Sydney. Leighton had contracted with Downview Pty Ltd to carry out the concreting for certain works on the construction site. Downview subcontracted the concrete pumping to Quentin Still and Jason Cook, who engaged Brian Fox and Warren Stewart in connection with the pumping for a concrete pour on 7 March 2003. Once the concrete pour had been completed, Mr Still, Mr Stewart and Mr Fox started to clean the concrete delivery pipes. This involved blowing an object through the pipes with compressed air. They moved the end pipe into position over a waste bin but did not secure it to the bin. The pipe whiplashed away from the waste bin and struck Mr Fox, significantly injuring him.   Mr Fox filed negligence claims against Leighton, Downview and Warren Stewart Pty Ltd (which had employed Warren Stewart) in the New South Wales District Court. The primary judge found that the accident was caused by the negligent conduct of Mr Still and Mr Stewart, but that there had been no relevant breach of duty by either Leighton or Downview. She gave judgment against Warren Stewart Pty Ltd, and ordered the company to pay damages of $472,561.95 to Mr Fox. Warren Stewart Pty Ltd has since been de-registered.   The Court of Appeal of the Supreme Court of New South Wales allowed Mr Fox’s appeal against the dismissal of his claims against Leighton and Downview, and ordered each of them to pay damages to Mr Fox of $472,562. The High Court granted Leighton and Downview special leave to appeal, and after Downview was de-registered, granted leave to substitute Downview’s insurer, Calliden Insurance Ltd, for Downview.   The High Court held that Leighton was not subject to a duty of care requiring that it provide training to subcontractors in the safe methods of carrying out the subcontractor’s specialised work. It found that Downview had engaged a competent independent contractor to do the concrete pumping and that it was not subject to a duty of care requiring that it provide safety training to that contractor. The Court of Appeal’s finding that Leighton and Downview were liable to pay damages to Mr Fox could not be sustained.   The High Court allowed each appeal and set aside orders made by the Court of Appeal. The Court ordered that Mr Fox’s appeals to the Court of Appeal should be dismissed.